JACKI LYDEN, host:

From NPR News, this is ALL THINGS CONSIDERED. I'm Jacki Lyden. After a lot of dark winter days, a sprout of springtime optimism from the Obama administration today.

(Soundbite of television program, "Fox News Sunday")

Ms. CHRISTINA ROMER (Chair, White House Council of Economic Advisors): We'll be seeing the signs that the economy has turned around.

LYDEN: That's Christina Romer, head of the White House Council of Economic Advisors. She said on Fox News Sunday that she's incredibly confident of a rebound within a year. But before you slip into those garden boots and plant a lot of new economic saplings, hear this warning.

(Soundbite of television program, "This Week")

Senator KENT CONRAD (Democrat, North Dakota): We have got to get back to a more sustainable fiscal circumstance. We cannot run budget deficits in the out years of over $1 trillion a year.

LYDEN: Those comments from a Democratic senator, Kent Conrad, on ABC's "This Week." And he was kind compared to what some Republicans are saying about Treasury Secretary Timothy Geithner, who'll unveil his trillion-dollar toxic asset treatment tomorrow.

Here's Alabama Republican Richard Shelby on Fox.

(Soundbite of television program)

Senator RICHARD SHELBY (Republican, Alabama): But he's going to do a 180-degree turnaround, I believe, to be a successful treasury secretary.

LYDEN: And with all that Washington political jockeying, tomorrow morning, stock traders will have eyes glued to their financial screens.

Mr. KEITH O'MALLEY (Day Trader, Hold Brothers Company): (Unintelligible) is down the most right now. It's $3. It's a $100 stock. So, it's only three percent, a little less than three percent on $1, $113. It seems like it's a little slow day because there's not much that's up or down today so far.

LYDEN: Not much doing at nine in the morning on Saint Patrick's Day last week. That might be a relief for those of us intimidated by the stock market's gyrations of late, but it's the uncertainty that's Keith O'Malley's obsession.

Mr. O'MALLEY: It seems like an angry woman sometimes, you know? And sometimes it's just a devilish, little, happy, you know, seal. I don't know. It's - as wrong as it seems sometimes, you know that the market's always right, you know? I mean, whatever it does and wants to do, you don't second guess it.

LYDEN: Keith is a day trader for the Hold Brothers Company, which has 1,500 traders around the world, and Keith is one of the best. His trading floor is on the 14th story of an office building in Jersey City, across the river from Wall Street.

Like other traders here, he's got three computer monitors in front of him and CNBC jabbering away. He buys and sells stocks in a flash. As a day trader, every second counts.

He's got CNBC patched into his phone to give him a five-second advantage on the TV broadcast. Take the news coming out of Newcourt, a steel company.

Mr. O'MALLEY: What I almost did, see this first quarter, 55 to 65 cents. I'm looking at that. It looks pretty darn good, right? But then, Bloomberg corrected themselves, and it says, see first quarter loss 55 to 65 cents, which is very bad.

LYDEN: Newcourt's earnings are down, but Keith didn't move fast enough on that, so he sells a few shares of U.S. Steel, figuring when one steel company goes, so goes another. A couple of clicks, bingo, $600 of profit, first trade of the day.

Keith is reading headlines off the screen at the same time as a voice is reading them over a loudspeaker, almost like train departures.

(Soundbite of loudspeaker system)

Unidentified Announcer: The economy has falling off a cliff…

LYDEN: Pretty grim assessment to start the day, the economy's falling off a cliff, and we haven't seen anything like in our lifetime.

Mr. O'MALLEY: Breaking news, right?

LYDEN: Do you hear that every day?

Mr. O'MALLEY: Really, you do. So, I mean, do you - I'm almost yawning that, you know, nothing he has seen in his lifetime, just from the fact, that of what's gone on this year. So, you know, for a year ago, we really would've, you know, played that a lot harder and aggressively.

LYDEN: That battle-hardened attitude began last Saint Patrick's Day, March 17, when the federal government entered the financial world big time. Federal Reserve Chair Ben Bernanke and then Treasury Secretary Henry Paulson had just ordered the sale of Bear Stearns, the investment bank that had survived the 1929 stock market crash.

Hold Brothers executive Chris O'Gorman says that changed everything, even the trading week.

Mr. CHRIS O'GORMAN (Executive, Hold Brothers): Every Sunday night, news came out. And so, my guys were here earlier and earlier on Monday mornings to get prepared to take advantage of that. And I think Paulson and Bernanke must have met every single weekend with all their advisors, and there was always somebody who had to be saved every Monday.

Every Friday was the game of who wouldn't be here on Monday. It brought a level of energy that, you know, 7:30 in the morning, everybody was here.

LYDEN: This is a perfect day trader market. These guys don't invest, they rarely hold a stock overnight, and they're not looking for long-term growth. At this office, they trade on the news, and there's been a lot of news lately. Keith O'Malley.

Mr. O'MALLEY: We work on volatility. So, as the markets have been bottomed out in 2008 and 2009, you know, it's been better for us. You try to game off your experience, at least I do, making bets where you think it's important because the volatility works in your favor a lot when you're right, but when you're wrong, it's, you know, it hurts.

Mr. GREG HOLD (Founder, Hold Brothers): It appealed to me because it's a system that rewards you for your intellect and your hard work, not necessarily your connections, your family, your - it's very fair.

LYDEN: Greg Hold is the founder of Hold Brothers, ironic name for a firm that's all about sells and shorts.

Mr. HOLD: When news come out on a stock, our traders determine what the price should be by shorting or going long, driving it down or up, and they do it instantly. So, if a stock is at 70, and they hear news, and it should go to 60, then they bring it down instantly. The public might have bought it too high of a price. So, our traders make the market efficient. They make it fair. They provide liquidity. They provide narrow spreads, and they're essential.

Mr. JOHN BOGLE (Founder, Vanguard Mutual Funds): It's a casino because when I make a brilliant sell decision, somebody else made a stupid buy decision.

LYDEN: John Bogle started Vanguard Mutual Funds in 1975, an industry gold standard, and he thinks this compulsive day trading is just…

Mr. BOGLE: Insanity is the best word I can come up with. They are speculators trading with other speculators. We have an orgy of speculation that we have never before witnessed in the history of our nation, and with stock turnover averaging, last year, something like 350 percent higher, far than it was in 1929.

So, the day traders are a small part of that, but representing the same thing. It's rank speculation, betting on prices and not owning companies to earn value.

LYDEN: Back at Hold Brothers, Keith O'Malley has decided to buy some Potash, 10,000 shares of a fertilizer company from Saskatchewan.

Mr. O'MALLEY: To me, I'm going to take that as they're reducing Potash production. I mean, the demand's not there. This is a situation where the market doesn't seem like I'm right - yeah, I've got to get out of this thing. And that's how you lose $20,000.

LYDEN: Whoa, sorry about that.

Mr. O'MALLEY: Oh, it happens.

LYDEN: I consult a running tab on the positions of all day traders at the Hold firm. Keith is doing the worst of all 1,500. His boss, Greg Hold, laughs it off, reminds me that a couple of years ago, Keith was voted one of the 30 best traders under 30 by an industry magazine. He can afford an off day, but how damaging to the market itself are those errors?

Mr. ANDREW LO (Business Professor, Massachusetts Institute of Technology): Now, obviously, when they all decide to trade in the same direction, that ends up being a bad thing.

LYDEN: MIT business professor Andrew Lo.

Mr. LO: But for the most part, on any typical day, you'll find day traders on both sides of the market, both buying and selling, and I think that activity ends up creating a lot more market depth and liquidity for the typical investor like us.

LYDEN: At Hold Brothers, the headlines just keep on coming.

(Soundbite of loudspeaker system)

Mr. KEVIN KETCHEM(ph): The senator's office says Congress will find a way to get bonuses back.

LYDEN: Day trading is not for everybody. Take Kevin Ketchem. He's the guy who reads the headlines into the mic. He likes it, but he didn't like trading.

Mr. KETCHEM: I wasn't really cut out for trading, just kind of panicked, got kind of too emotionally involved in the stocks.

LYDEN: Just a few seats over, Keith O'Malley's trying to make up for the day's losses before the market closes.

Mr. O'MALLEY: For us, though - I mean, I guess there's just less stuff to trade now, you know. Everything is so low-priced, and everyone seems like they're numb to the news. Is it going to, stimulate the markets?

LYDEN: That day last week, the DOW was up 178 points. Keith lost about $25,000. The next day, though, he says he killed.

So, tomorrow morning, when you open up the paper to read how the government is going to deal with the banking system's toxic assets, know this. A guy in Jersey City has clicked a couple of keys and made or lost thousands in the time it took you to say Treasury Secretary Timothy Geithner.

(Soundbite of music)

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